Aurobindo in great health

Aurobindo Pharma is a stock in the limelight today morning. The stock has spurted up over 4.5% at Rs.403.35, closer to its intra day high at Rs.404.20. Its 52-week high to not too far off at Rs.417.90.

The stock is reacting today to the news its announced on Friday, that its European subsidiary has signed an agreement to buy commercial operations in 7 Euro nations of Actavis. This is being acquired at a price of around EUR 30  million  and this is to be funded entirely through internal accruals.

The management estimates the net sales for the acquired businesses would be around EUR 320 million in 2013 with a growth rate of over 10% year-on-year. Although these businesses are currently loss-making, Aurobindo expects them to return to profitability in combination with its vertically integrated platform and existing commercial infrastructure. The acquisition will make Aurobindo one of the leading Indian pharmaceutical companies in Europe. Since 2006 Aurobindo has been steadily expanding its European footprint through an increasing presence in UK, Spain and Germany. The acquisition will enable Aurobindo to achieve critical mass in Western Europe with a top 10 position in several key markets.